Environmentally friendly management of dairy supply chain for designing a green products' portfolio

Abstract

The study proposes an optimization approach for design of “green” products' portfolio of a supply chain for curd production. It includes three interconnected models for describing curd production, supply chain and its environmental impact. The latter is assessed in terms of wastewater and CO2 emissions associated with the curd production and the transportation of raw material and products. The models are included in a broader optimization framework whereby the environmental criteria are defined in terms of costs such as the best trade-off between total profit and environmental impact to be achieved. The proposed approach is applied to a Bulgarian case study for production of two types of curd in dairy supply chain involving suppliers, dairies and markets. Two optimization problems for “green” products portfolio and profit products' portfolio design are formulated and solved. The obtained results show that the “green” products portfolio is limited by the environmental impact consideration and the optimal profit products' portfolio is limited by the plants' capacities. The successful implementation of the proposed approach opens the prospect of expanding not only to the whole range of dairy products but also the entire supply chain that includes players which are in a competition with each other.